What is it about money that makes it so hard to keep track of? And what is it about the seemingly inescapable tendency for our expenses to always meet our income? If you’ve ever had a substantial raise or have come into a small sum of money, you probably know just how quickly your lifestyle can change to meet your current net worth. If you know this experience all too well, then you are desperately in need of a financial plan. Without a financial plan, it won’t matter how much your salary grows – because you won’t know how to make your money work for you. If you have no idea where to start, here are a few pointers on how to create a personal financial plan.
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Money is so simple conceptually, but so complicated in reality. Everyone understands exactly how it works. You perform a service or sell some sort of product and you are compensated with money you can then turn around and use to purchase the services or products you require. It’s black and white, right? While the concept is plain enough for anyone to grasp, the market economy is by no means as easy. How to navigate the world of credit, how to organize your finances, how to grow your savings and how to make your money work for you are all strategies people grapple with during the course of their lives, sometimes successfully, but often with disappointing results. That’s why financial advisors exist. Their job is to look at your goals and help you realize them. But how do you know if you need a financial advisor?
The first thing you must look at is if you can afford one. Financial advisors earn that title by graduating with an advanced degree and logging many years on the job. But their job isn’t done after they hang that diploma on the wall. Financial advisors must stay current on changes in the market, what strategies are proving successful, and which investment tools are no longer attractive. It’s a constant juggling act of research and client hours. With this sort of work load you can expect a quality financial advisor to demand a significant salary. You will be just one of his many clients, and pay an hourly fee for his time. So if you don’t have a significant portfolio and money to spare each month you can’t go down this road.